Reaching new heights in connected flight ANNUAL REPORT 2013 Gogo is a leading aircraft communications service provider for the global aviation industry. Gogo offers the broadest array of connectivity solutions for the aviation industry – serving the needs of aircraft, everywhere. COMMERCIAL BUSINESS AVIATION AVIATION 2,000+ 2,000+ Commercial aircraft Business aircraft equipped equipped with Gogo with Gogo’s broadband connectivity service 7, 5 00 + Daily commercial flights 5,100+ Business aircraft equipped with Gogo’s satellite telecommunications service CONNECTIVITY SYSTEMS CONNECTIVITY SYSTEMS AIR-TO-GROUND AIR-TO-GROUND HYBRID* SATELLITE SATELLITE *Expected to be commercially available in 2014 We create service offerings to meet the needs of every passenger, aircraft owner, and operator. PASSENGER PASSENGER CONNECTIVITY ENTERTAINMENT GOGO SIGNATURE OPERATIONS-ORIENTED SERVICES COMMUNICATIONS SERVICES DEAR SHAREHOLDERS, At the beginning of 2013, Gogo’s goals were ambitious. aircraft operating on our ATG We set out to expand our in-flight communications leadership on network in the U.S. and Canada, MICHAEL a global scale, develop new technologies to bring more bandwidth and nearly 5,200 connected aircraft SMALL to the sky and launch several new products and services for both operating on satellite networks. CHIEF EXECUTIVE the commercial and business aviation markets; all of this to fulfill OFFICER our never ending quest to improve the flying experience. We focus solely on delivering broadband connectivity and connectivity-related services to Thanks to the talent we have in place here at Gogo, I’m pleased the global aviation industry. One of the keys to our success is to say that 2013 was a resounding success by any measure. our operational expertise. Our focus and experience in building Our success was highlighted by announcing partnerships with our and operating broadband communications networks make us first two international airlines — Japan Airlines and Aeromexico. a strong strategic ally for our partners in both commercial and business aviation. Our successes continued with the roll-out of our next generation Air-to-Ground (ATG) technology – ATG-4, which is bringing more With more than 50 million passenger connectivity sessions since capacity to the aircraft; the announcement of our Ground-to-Orbit we launched our commercial aviation business in 2008, we’ve (GTO) technology, which is targeted at North America and offers gained unmatched expertise. We’ve solved problems that many more than 20 times the bandwidth provided by our original ATG of our competitors are only beginning to confront. Despite this technology; the significant expansion of our Ku-band satellite industry-leading knowledge, we don’t rest on our laurels, and we network to include more than 140 countries around the world; continue to focus on taking our operational expertise to the next and, most recently, the announcement of our 2Ku technology, level. Our scale uniquely enables us to make industry-leading R&D which will offer market-leading performance similar to GTO but investments which will continue to be a significant differentiator. on a global scale. Our engineers are currently working on next generation solutions to address the insatiable demand for connectivity In the business aviation market, we launched our new Text & around the world. Talk product and our Universal Cabin System — the industry’s first all-in-one smart router and media server. We also introduced Today, Gogo is the largest and the most cost-efficient provider ATG2000 — an ATG system designed for the turbo prop and of bandwidth to the global aviation industry. We have designed, small jet market — and Gogo Vision, Gogo’s streaming in-flight built and certified the broadest array of connectivity systems, entertainment service. thus enabling connectivity for the broadest range of aircraft — from small turbo props to large twin aisle commercial jets. In the midst of all this activity, not only did we become a public Gogo’s robust communications services infrastructure is currently company, but we also delivered record financial and operating supported by our ATG network which provides coverage in the results for each quarter as well as the full year. Our revenue grew continental U.S., Alaska and Canada. In 2013, we expanded an extraordinary 41% to reach $328.1 million for 2013. Adjusted our global satellite network to enhance coverage and capacity in EBITDA of $8.4 million was down slightly versus 2012 as a North America and to provide global connectivity services. result of the $41.0 million segment loss from our international expansion efforts. The international market presents a significant INCREASING CAPACITY AND growth opportunity for Gogo and we continue to invest in that business in order to achieve global scale. IMPROVING OUR NETWORK Our ATG network is currently comprised of more than 200 EXPANDING ON OUR COMMUNICATIONS cell sites including 12 in Canada. During 2013, we added 40 LEADERSHIP AT 30K FEET cell sites and rolled out fiber to three quarters of the network. We expect to continue to add cell sites and fiber to accommodate Gogo is a leading aircraft communications service provider for growth in demand for connectivity services in the U.S. and the global aviation industry. We have more than 4,000 connected Canada. Furthermore, we are aggressively deploying ATG-4, GOGOAIR.COM our next generation ATG technology. ATG-4 triples the speed of The global business aviation industry included approximately ATG, providing peak speeds to the aircraft of nearly 10 Mbps. 27,000 aircraft in 2013, of which 20,000 were in North America. Currently, we have more than 500 aircraft equipped with ATG-4 This number is projected to increase by 50 percent over the and by the end of 2014 we expect to have nearly 800 aircraft next 10 years. Today, Gogo has the largest share in this segment installed with the service. and provides both equipment and service for the three primary networks in this market: ATG, Iridium and SwiftBroadband. Our In 2013, we announced the upcoming launch of our Ground- ATG equipment is lightweight and the least expensive broadband to-Orbit (GTO) hybrid technology solution, which combines the connectivity system on the market, making it, we believe, the best attributes of satellite and ATG connectivity. The advantages most practical solution for private aircraft owners and operators. of using satellite for reception on the aircraft and Gogo’s ATG In 2013, Gogo’s business aviation segment shipped a record Network for transmission from the aircraft are unprecedented 900 ATG systems and ended the year with more than 2,000 and significant. Gogo’s receive-only antenna will be two times ATG aircraft online. Today, about only 10 percent of the business more spectrally efficient and half the height of other antennas in aviation market in North America is equipped with broadband the commercial aviation market. The low profile of the antenna connectivity. The low penetration in this market provides a will result in less drag and therefore less fuel burn on the tremendous growth opportunity for us, in terms of increasing aircraft and, ultimately, in greater operational efficiencies for our both the number of aircraft online and the number of services we airline partners. provide to each aircraft. We expect GTO to deliver industry leading speeds in excess According to Boeing, there were approximately 17,000 of 70 Mbps to the aircraft, resulting in enough bandwidth to commercial aircraft around the world in 2013, excluding smaller connect every passenger on the aircraft with a best-in-class aircraft with 50 seats or less. Of those, approximately 13,000 browsing experience. We also most recently announced our 2Ku were outside of North America. We expect to see strong growth technology. 2Ku will rely on two low-profile antennas that will be in revenue per aircraft in North America as adoption of our up to two times more spectrally efficient than other antennas in connectivity services increases and new products and services the commercial aviation market. The higher spectral efficiency are deployed. Internationally, we expect to see growth in aircraft will produce more bandwidth at a lower cost and offer increased online and revenue per aircraft, as very few of those 13,000 operational benefits for our airline partners. This technology is aircraft have broadband connectivity today. We currently have expected to offer a GTO-like experience on a global basis. a backlog of approximately 330 international aircraft, most of which will be installed by the end of 2015. We believe a large Our Ku-band satellite network currently provides coverage in number of airlines will commit to a connectivity services provider more than 140 countries around the world and we continue to during the next several years. Our technology leadership, scale, expand our coverage area. We expect to have 50 to 100 aircraft operational expertise and track record position us extremely well utilizing this network by the end of 2014. We are excited to in the international market. This, we believe, will drive significant demonstrate our operational expertise and quality of service for value for our shareholders. our international airline partners. Gogo has also been named a distributor of Inmarsat’s Ka-band Global Express satellite Finally, I’d like to thank my colleagues at Gogo. It is their network, which is expected to launch in 2015. dedication, talent and passion that enable us to realize our vision for the connected aircraft. I’d also like to thank our airline A WELL-DEFINED GROWTH OPPORTUNITY partners, business aviation customers, and shareholders for their ongoing support of the business during our first year as a Our growth opportunity is large, early-stage and well defined. public company — your confidence and commitment have been integral to our success. Our formula for growth is simple: grow the number of aircraft online and increase revenue per aircraft in both business and Sincerely, commercial aviation.